Racketeering suit filed against DirecTV

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Lawyers for three men whose online equipment purchases made them targets of DirecTV's anti-piracy campaign are hoping to turn the tables on the satellite company by suing under the mob-busting Racketeer Influenced and Corrupt Organizations (RICO) federal organized crime statute.

The lawsuit was filed late last month on behalf of Texas-based physician Rod Sosa and two other men who each paid DirecTV $3,500 after receiving legal threats from the company. The men all wound up in DirecTV's crosshairs after purchasing smart card programmers or related devices from Web-based retailers that cater to pirates, but they all say they had legitimate use for the equipment, and that they settled with DirecTV only to avoid costly litigation.

"These are three guys who had nothing to do with any satellite piracy, extorted into paying the money," says California lawyer Jeffrey Wilens, who filed the case with Vancouver attorney Dean Webb.

In an interview in July, Sosa told SecurityFocus that he had purchased a smart card programmer to develop a secure PC for medical office use, and was "completely flabbergasted" when DirecTV accused him of being a pirate. The other plaintiffs in the case are Gary Whittaker and Rodney Bylsma.

This year alone DirecTV has sent out tens of thousands of letters to people who've turned up on the customer lists of equipment-sellers raided under the Digital Millennium Copyright Act for allegedly peddling piracy devices. The letters usually demand a $3,500 settlement under threat of litigation, and the company has filed lawsuits against over 8,700 people who've ignored the letters or refused to settle. None of those lawsuits have yet gone to trial.

DirecTV is facing growing criticism over the campaign after targeting some innocent techies who had perfectly legal uses for the equipment they purchased. The company says the number of non-pirates swept into their dragnet is minuscule, but advocacy groups and lawyers have received enough consumer complaints to prompt the Electronic Frontier Foundation and the Stanford Center for Internet and Society to launch an informational website last month apprising crackdown targets of their legal rights.

The new RICO suit accuses DirecTV of organized extortion, money laundering and fraud, and asks the court to certify a class action on behalf of anyone who capitulated to DirecTV's demand letters.

The federal RICO case is by far the most ambitious legal counterattack DirecTV has faced, though it is similar to a lawsuit Wilens filed last year in Los Angeles, on behalf of some of the same clients, including Sosa. A county judge dismissed that case last April under a California law aimed at discouraging lawsuits that stifle constitutionally-protected activities. The judge ruled that DirecTV's letters were sent in connection with litigation, and were therefore privileged.

"We're confident that the federal court will come to the same conclusion: that this case is without merit and should be dismissed," says DirecTV spokesman Robert Mercer. "This is an attempt to have a second bite of the apple."

But Wilens is optimistic, buoyed by a federal district court decision in New York last month that allowed a RICO lawsuit against Cablevision Systems Corp., a cable T.V. company that sent DirecTV-style demand letters to consumers who had purchased third-party decoder boxes.

Wilens estimates that DirecTV has taken in at least $35 million in settlements; the company won't comment on the amount.